PAY & CONDITIONS - 24.05.2022

Easy bonus payments?

As well as recognising employees’ contribution over a peak business period, the Easyjet bonus is aimed at ensuring it retains its staff throughout the summer, as it won’t be payable to anyone who leaves employment before October 2022. You should consider the following before introducing a similar one-off guaranteed bonus:

• how much the bonus will be
• whether the bonus will only be payable to certain categories of employee, or whether the amount will vary between different categories of employee (watching out for unlawful discrimination)
• what period the bonus will cover
• when the bonus will be payable, e.g. the next payroll cycle following the end of the designated bonus period
• whether the bonus will be calculated on a pro rata basis for part-time staff - you should do this
• whether you’ll pay a pro rata bonus or nothing at all to a new recruit who commences employment part-way through the designated bonus period
• whether you’ll provide that no bonus is payable if an employee resigns from your employment, or is dismissed, before the bonus payment date, or if they’re serving notice of termination on the bonus payment date
• whether the bonus can be withheld in any circumstances, e.g. if the employee receives a disciplinary or performance warning under your disciplinary/capability procedure during the designated bonus period.

Do set out your rules in writing in advance of the designated bonus period starting, such as in a letter, even if the bonus is only going to be a one-off single payment. The bonus will then be subject to income tax and NI, and it should be taxed at the time of receipt.